From Software To Hardware: Why Internet companies are selling products

The computing industry has grown steadily from the early nineties. Traditionally companies like Apple or IBM produced both software (services or programmes) and hardware (products or devices). During the first decade of the new millennium, computing firms have been attempting to sell anything that they can. After building a strong brand, they capitalize on their brand name, selling products or services that were not initially their market. Why? Let’s explore the companies that have ventured into new territories.

Amazon

Amazon, founded in 1994, was initially an online bookstore. It grew to sell almost everything, becoming the world’s largest online retailer, and providing online-based services across the globe. It joined the ranks of Fortune 500 and expanded into European countries. The brand was firmly established as a cheap online bookstore, as an alternative to more expensive high street book stores. Amazon also now sell a variety of other products via their online portal, including food, clothing, media, homewares, and technology. In 2007, Amazon produced their first ebook reader, the Kindle, which became an instant hit selling out in five and a half hours. The Kindle has been now a best seller on Amazon.com and Amazon.co.uk for several consecutive months. They are now set to launch the second version of their tablet PC, Kindle Fire.

Google

Google, the world’s largest online search giant, began in 1998. They provided many web services including search, online advertising, and web analytics. By 2007,Google was planning to produce operating systems for tablets and mobiles, coming in direct competition with other software vendors. They produced their first phone in 2006 and the following year produced the Chromebook, a laptop running Google’s own operating system. Now, many tablets now come equipped with an Android OS. Now, Android poses the only real competition to Apple’s iOS domination in tablets.

Why are companies going everywhere?

The primary motive of course is revenue maximization; however, there are other underlying reasons. Firstly, in the technology industry there is a great deal of collaboration, which makes it easier to diversify. For example, HTC and Samsung helped Google produce Nexus. Google also acquired Motorola to smooth their transition into the mobile market. There is plenty of cooperation among competitors – Apple’s iPhone, a direct competitor to Google’s Nexus, uses a fully integrated Google Maps. Secondly, companies are moving into related industries in order to increase the sales of their core product. Amazon.com is complementing their core product – books – by selling the Kindle ebook reader. At present, five years after the first Kindle, Amazon ebook sales have surpassed print editions in the USA.

Conclusion

The computer industry is witnessing integration at individual company level to increase customer satisfaction. Apple was the first firm to provide a holistic package by offering products (iPhone and iMac) as well as services (iTunes and Macintosh OS). The success of this model was indisputable which encouraged other companies to imitate. As this model settles in and is adopted industry-wide new innovative models will spring up whose success will be based on the capability of the business strategy to translate their tactics into tangible financial results.